Television Executives Still Hesitant About Automation

Much of the debate about the convergence of digital video and TV advertising has centered on budget and measurement.

Members of the advertising industry have wondered whether digital video would cannibalize TV ad dollars and to what extent the right metrics are in place to effectively execute cross-platform video buys.

A report from Nielsen and Simulmedia, which polled 40 media, agency and analyst sources, found that as digital video proliferates, there will be growing demand for programmatic access to television inventory.

But television network executives are apprehensive about this shift toward automation and addressable, data-driven targeting, which some view as a threat to traditional TV ad-buying necessities like GRP ratings and established advertiser relationships.

“Silicon Valley doesn’t understand TV,” claimed one marketer close to the network world, who spoke to Nielsen and Simulmedia for the "Data-Driven Future of Video Advertising" report. “They only understand digital. And, until they begin to understand both, there will be a disconnect.”

If this marketer’s view reflects that of his peers, it would explain why, according to data shared by video ad platform FreeWheel during last Thursday’s Advanced Advertising forum in New York, only 4.5% of programmer/multichannel video programming distributor (MVPD) premium ads were sold programmatically through resellers.

“Looking at what percentage of volume comes through ad networks and exchanges, it was only about 5%, which indicates programmers owning premium content are still opting to sell direct to the agency and advertiser because they want control over pricing, which was surprising,” said Brian Dutt, director of advisory services at FreeWheel.

In many instances, resellers provide publishers enhanced automation and the ability to compensate for unexpected spikes in traffic or sales shortages, he noted.

Amit Seth, EVP of global media products at Nielsen, noted a disconnect between the digital ad tech world and the traditional broadcast world. Seth distilled Silicon Valley’s attitude as: “You need to adopt digital, provide the ability to advertise on an audience basis and therefore yield to the programmatic landscape.”

But the television industry insisted that “TV will remain.”

There was also the debate whether programmatic media buying will replace the traditional practice in which television advertisers commit dollars up front to commercial TV airtime.

As it turned out, “No one believed in the room that the upfront will go away, and Dave and [my] goal was to have the team agree on finding a path forward for both sides,” Seth said. “That was – programmatic will come to TV, but it will come slower than usual” and organizational silos will begin to break down as, increasingly, TV and digital have more meetings of (different) minds.